Problem 16-6 10 points a. Consider a call option. If, in a two-state model, a stock can take a price of $160 or $120, what would be the hedge ratio for each of the following exercise prices: $160, $150, $140, $120? (Leave no cells blank - be certain to enter "0" wherever required. Round your answers to 2 decimal places.) eBook Hedge Ratio Print References X $ 160 $ 150 $ 140 $ 120 b. What do you conclude about the hedge ratio as the option becomes progressively more in the money? Increases to a maximum of 1.0 Decreases to a minimum of O